By far the most popular residency visa, Panama’s Pensionado Visa is a good deal. Geared for US retirees, it makes permanent residency easy. However, for the citizens of some countries, the fine print could be a problem.
What’s in a name? I suppose the first thing to clear up is that you do not have to be a pensioner, in the traditional sense of the word, to be able to apply for this visa. Any person over the age of 18 can apply for a Pensionado Visa!
Panama is not the only country in the world that caters for retirees. However, with the largest economy and one of the top 15 richest countries on their doorstep, it is understandable that such a visa exists. Retirees benefit in terms of lower cost of living and a desirable climate, while Panama wins in terms of an inflow of money.
In general, citizens from countries with strong social security or pension structure, find the Pensionado Visa an easy option. Citizens from some other countries might find it somewhere between difficult and impossible.
Benefits of the Pensionado Visa
One of the biggest benefits of this visa is that an applicant does not have to make a lump sum deposit into a Panama bank account prior to application.
A second benefit and quite an attractive one at that is the list of discounts available to holders of the Pensionado Visa. Here is a short overview:
|Discount||Item / Service|
|Once-off||duty exemption for importing household goods to a value of $10,000|
|Bi-annual||duty exemption for importing a new car|
|50% off||entertainment anywhere in the country (movies, concerts, sports)|
|off hotel stays from Monday through Thursday|
|reduction in closing costs for home loans|
|30% off||bus, boat, and train fares|
|off hotel stays from Friday through Sunday|
|25% off||airline tickets|
|discounts on utility bills|
|20% off||medical consultations|
|professional and technical services|
|15% off||at fast-food restaurants|
|hospital bills (if no insurance applies)|
|off dental and eye exams|
|10% off||prescription medicines|
|1% less on||home mortgages for homes used for personal residence|
An interesting fact about Panama is that permanent residents and citizens of retirement age (55 for women and 60 for men) qualify for most of these discounts anyway.
Some vendors will not give a discount automatically. Sometimes you have to ask for it, so learn the Spanish phrase: “Por favour, deme mi descuento de pensionado.” Even then, receiving the discount is not certain, and picking a fight about it is not worth it.
Another noteworthy benefit of the Pensionado Visa is the government fee structure. There are no immigration or repatriation fees payable, you only pay for the multi-entry visa!
The basis of the Pensionado Visa is a lifetime annuity income. There are two different options to consider:
Option 1 – Annuity only
A lifetime monthly annuity income of at least $1,000 received by the main applicant, or in the case of a married couple, their combined income.
Option 2 – Annuity and real estate
A lifetime monthly annuity income of at least $750 plus the purchase of real estate of at least $100,000.
These two options clearly demonstrate the basis of the visa. Please be aware that there are many more requirements; I discuss those in detail in the Panama Residency Guide.
The fine print regarding annuity income
We need to clarify the use of the phrase “pension”. In terms of the Pensionado Visa, the income need not be a pension per se or a pension in the traditional sense of the word. It can be an annuity income earned from investments.
In order to point out what the challenge may be, we first need to look at the exact regulations regarding pensions.
If the pension is paid by a government/government institution/social security:
- A letter from the respective institution that certifies that the applicant receives a pension for life of at least $1,000 per month.
If the pension is paid by a private institution:
- A letter from the institution certifying that the applicant receives a pension for life of at least $1,000 per month;
- Certification of the existence of the institution and that it is in good standing with its government;
- Proof of payment of the monthly pension (typically by way of bank statement).
The words that are underlined must appear in the letter.
What is the problem?
Applicants may face one or more, of the following three potential problems:
Problem #1: Income from a government pension
If the government or country in question has a soft currency, it might be unable or unwilling to express the income in US$, or immigration might reject the letter.
Problem #2: Income from a private pension
If the institution is from a country with a soft currency, or investments are held as such, it might be unable or unwilling to state the income in US$.
Problem #3: Income from private investments
Many people live off their own “pensions”, which is in essence annuity income from private investments. The first hurdle is that some fund managers would not qualify to issue the required letter. Mutual funds, trusts, banks or insurance companies, which are properly licensed, would qualify.
The next hurdle is the question of a lifetime annuity. Even though the relevant institution might be able to state an income in US$, some might not be able to state that the income is “for life”, as required by immigration.
That is a summary of the problems that some applicants may encounter. It must, however, be seen in perspective. The vast majority of applicants have nothing to worry about; it is a relatively small number of applicants that should be aware of these challenges.
As always, forewarned is forearmed.
What is the alternative?
The most common alternative to the Pensionado Visa is the Friendly Nations Visa.
It has a completely different set of requirements and is more expensive to obtain. Nevertheless, for many people, it remains the best alternative to secure permanent residency in Panama.
There are other alternatives, but they have a number of disadvantages not applicable to the Pensionado or Friendly Nations Visas.
Is there a difference in the process?
Apart from the upfront documentation required, the process to obtain a Friendly Nations Visa is very similar to that of the Pensionado Visa.
Suggestion: if you suspect that your application for a Panama Pensionado Visa will encounter one or more of the problems discussed, rather liaise with a good immigration lawyer beforehand. Do it long before your planned relocation to avoid wasting time and money on unnecessary or incorrect documentation.
Important note: The real estate mentioned earlier, in Option 2, must be registered in the applicant’s personal name, not a corporation or foundation.
“Education is when you read the fine print. Experience is what you get if you don’t” – Pete Seeger
I would love to have your thoughts on this specific visa or the issues regarding confirmation letters.
Below are a few tours I would definitely recommend doing while in Panama City.
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